The Federal Housing Finance Agency today announced that the maximum baseline conforming loan limit for mortgage loans acquired by Fannie Mae and Freddie Mac in 2017 will increase to $424,100 from $417,000. This will be the first increase in the conforming loan limit since it was raised to $417,000 in 2006.
The Housing and Economic Recovery Act of 2008 established $417,000 as the baseline loan limit and mandated that after a period of price declines, the baseline loan limit would not be permitted to rise until home prices had returned to pre-decline levels.
The loan limit will rise 1.7% in 2017 because the Federal Housing Finance Agency has determined that the average U.S. home value in the third quarter of this year increased 1.7% above its level in the third quarter of 2007.
Higher loan limits will be in effect in higher-cost areas as well. In areas where 115% of the local median home value exceeds the baseline loan limit, the maximum area loan limit will be higher. The new ceiling loan limit in high-cost markets will be $636,150 (150% of the $424,100) for single-family properties. The previous ceiling was $625,500.
Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $636,150 for single-family properties, but actual loan limits may be higher in some specific locations. A list of the 2017 maximum conforming loan limits for all counties and county-equivalent areas in the country may be found here.
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